New VAT rate has caused no problems at Latvian stores

The introduction of the reduced value-added tax rate in Latvia, including the re-programming of cash registered and systems, passed without any incidents and unexpected problems, believes Latvian Merchants Association's President Henriks Danusevics.

The State Revenue Service had
timely announced that retailers would have to re-program their cash registers,
which all the retailers have managed to do on time, said Danusevics.

Enina also said that most customers
were pleased at the reduced prices.

Maxima
Latvija press secretary Ivars Andins
told LETA that the changing of price
tags at Maxima stores might take a
few days, as price tags for about 25,000 various goods would have to be
changed. So far, however, no problems have been reported from Maxima stores regarding the reduction in
the VAT rate, said Andins, adding that a majority of residents was aware of the
changes.

As reported, the VAT rate was
reduced from 22% to 21% as of July 1, according to amendments on the Law on VAT
passed in the final reading by Saeima this past May.

The reduction of the VAT rate from
22 to 21% this year will leave the budget with LVL 16.5 million less in revenue
this year, and LVL 40.5 million less in revenue in 2013.

The Finance Ministry explains that
reducing the VAT rate will improve Latvia's competitiveness in the region and
reduce the pressure of inflation on Latvia's residents.

The lower VAT rate will also be
closer to Lithuanian and Estonian VAT rates – 21% and 20% respectively.

Future of tomorrows’ economy: incentives for business The future’s economic development will be based on a reduced-to-minimum distance between the supply-demand sides of the production chain. Another change is a shift from economic ownership categories to a “user-ship” one. Business in the Baltics has to see the future trends and accommodate to changes…